Why in the World Are We All Keynesians Again? Executive Summary
... that fiscal stimulus spending is at all effective. Indeed, while one can find studies to support almost any position in the policy debate, the most compelling efforts to isolate exogenous changes in government spending and estimate their effect on gross domestic product (GDP) report that each additi ...
... that fiscal stimulus spending is at all effective. Indeed, while one can find studies to support almost any position in the policy debate, the most compelling efforts to isolate exogenous changes in government spending and estimate their effect on gross domestic product (GDP) report that each additi ...
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... This paper aims to assess the magnitude of the stimulus programs announced by Euro area governments in 2008 and 2009 and quantify their effect on economic activity. A macroeconomic model is needed to distinguish the impact of government actions on the economy from other factors. Because of modeling ...
... This paper aims to assess the magnitude of the stimulus programs announced by Euro area governments in 2008 and 2009 and quantify their effect on economic activity. A macroeconomic model is needed to distinguish the impact of government actions on the economy from other factors. Because of modeling ...
The politics of fiscal policy during economic downturns, 1981-2010
... foreign producers, via demand for imported goods and services, while its negative consequences for export competitiveness matter more to the economy as a whole. In the absence of international coordination, something of a prisoner’s dilemma arises as each government waits for its trade partners to u ...
... foreign producers, via demand for imported goods and services, while its negative consequences for export competitiveness matter more to the economy as a whole. In the absence of international coordination, something of a prisoner’s dilemma arises as each government waits for its trade partners to u ...
The Strange Case of Domestic Policy Cooperation in the
... analysis suggesting that international spillovers were limited (although how this linked with a marked global business cycle was never well explained). In particular, results from large econometric models that focused on international trade links and largely ignored substantial international asset p ...
... analysis suggesting that international spillovers were limited (although how this linked with a marked global business cycle was never well explained). In particular, results from large econometric models that focused on international trade links and largely ignored substantial international asset p ...
Title Tales of Expansionary Fiscal Contractions in Two European
... Blanchard (1985), Sutherland examines a change in the time profile of taxation. However, there are important differences between the change in the time profile of taxation specified by Sutherland and that specified by Blanchard (1985). In the Blanchard model the tax changes are small, known, and off ...
... Blanchard (1985), Sutherland examines a change in the time profile of taxation. However, there are important differences between the change in the time profile of taxation specified by Sutherland and that specified by Blanchard (1985). In the Blanchard model the tax changes are small, known, and off ...
hovedtal for dansk økonomi
... could be that the Danish economy is very small and very open, extensively driven by external impacts. Another contributing factor could be that automatic stabilisers are stronger in Denmark than in most other countries. Finally, the Chart shows that the effect on private consumption is limited. The ...
... could be that the Danish economy is very small and very open, extensively driven by external impacts. Another contributing factor could be that automatic stabilisers are stronger in Denmark than in most other countries. Finally, the Chart shows that the effect on private consumption is limited. The ...
1 Tales of Expansionary Fiscal Contractions in Two European
... Blanchard (1985), Sutherland examines a change in the time profile of taxation. However, there are important differences between the change in the time profile of taxation specified by Sutherland and that specified by Blanchard (1985). In the Blanchard model the tax changes are small, known, and off ...
... Blanchard (1985), Sutherland examines a change in the time profile of taxation. However, there are important differences between the change in the time profile of taxation specified by Sutherland and that specified by Blanchard (1985). In the Blanchard model the tax changes are small, known, and off ...
The Fall and Rise of Keynesian Fiscal Policy
... concerns about a recession developed, Congress added a set of cash rebates to the original set of tax cuts proposed by President Bush, in order to help stimulate the economy in the short run. In early 2002, in response to the 2001 recession that was not then known to have ended, Congress introduced ...
... concerns about a recession developed, Congress added a set of cash rebates to the original set of tax cuts proposed by President Bush, in order to help stimulate the economy in the short run. In early 2002, in response to the 2001 recession that was not then known to have ended, Congress introduced ...
New Keynesian versus Old Keynesian Government Spending
... average of the two models of Romer and Bernstein. The simulations are done using a new database of macroeconomic models designed explicitly with the purpose of doing such policy evaluation and robustness studies.7 The increase in government spending is assumed to start in the first quarter of calend ...
... average of the two models of Romer and Bernstein. The simulations are done using a new database of macroeconomic models designed explicitly with the purpose of doing such policy evaluation and robustness studies.7 The increase in government spending is assumed to start in the first quarter of calend ...
If, When, How: A Primer on Fiscal Stimulus
... tainty about the effects of fiscal and monetary stimulus, a mixture of the two provides greater confidence about the economic outcome. However, it would be better not to have a fiscal stimulus at all than to have tax cuts or spending increases that are poorly timed, badly targeted, or permanently i ...
... tainty about the effects of fiscal and monetary stimulus, a mixture of the two provides greater confidence about the economic outcome. However, it would be better not to have a fiscal stimulus at all than to have tax cuts or spending increases that are poorly timed, badly targeted, or permanently i ...
If, When, How: A Primer on Fiscal Stimulus
... include legislated tax cuts or spending increases designed to give a quick boost to the economy by increasing aggregate demand. The President and Congressional leaders have said they are giving serious thought to possible fiscal measures. In considering fiscal policy at this juncture, policymakers n ...
... include legislated tax cuts or spending increases designed to give a quick boost to the economy by increasing aggregate demand. The President and Congressional leaders have said they are giving serious thought to possible fiscal measures. In considering fiscal policy at this juncture, policymakers n ...
as a PDF
... practical, and common sense grounds—they saw the market as the least worst alternative for achieving the goals that they believed society felt was important. Those goals of economic policy in which Classical economists directed policy included much more than material welfare, which they saw as only ...
... practical, and common sense grounds—they saw the market as the least worst alternative for achieving the goals that they believed society felt was important. Those goals of economic policy in which Classical economists directed policy included much more than material welfare, which they saw as only ...
CEPR responds to the IMF’s defense Mark Weisbrot
... discussion on October 15, 2009.1 Most of the arguments, as well as graphs and charts, can also be found on the IMF web site,2 and in two recent papers.3 The IMF’s first argument is that its policies have been “countercyclical, not procyclical!” as expressed in the PowerPoint presentation. The IMF’s ...
... discussion on October 15, 2009.1 Most of the arguments, as well as graphs and charts, can also be found on the IMF web site,2 and in two recent papers.3 The IMF’s first argument is that its policies have been “countercyclical, not procyclical!” as expressed in the PowerPoint presentation. The IMF’s ...
PEOPLE IN ECONOMICS: The $787 Billion Question - Finance
... had lost 240,000 jobs in October, a sign that the financial crisis was spreading to the real economy. Obama began the meeting by saying that monetary policy had done all it could to solve the crisis, so using fiscal—taxing and spending—policy was the only option. Though Romer agreed that fiscal sti ...
... had lost 240,000 jobs in October, a sign that the financial crisis was spreading to the real economy. Obama began the meeting by saying that monetary policy had done all it could to solve the crisis, so using fiscal—taxing and spending—policy was the only option. Though Romer agreed that fiscal sti ...
RBC and New Keynesian Models
... Employment and Unemployment in the Real Business Cycle Model • The real business cycle model explains fluctuations in employment and unemployment with intertemporal substitution—the willingness to shift work effort over time as real wages and real interest rates change • An increase (decrease) in p ...
... Employment and Unemployment in the Real Business Cycle Model • The real business cycle model explains fluctuations in employment and unemployment with intertemporal substitution—the willingness to shift work effort over time as real wages and real interest rates change • An increase (decrease) in p ...
“Timely, Targeted, and Temporary?” An Analysis
... not represent official positions of the Mercatus Center or George Mason University. ...
... not represent official positions of the Mercatus Center or George Mason University. ...
Macroeconomics: Events and Ideas
... Research, an independent, nonprofit organization that to this day has the official role of declaring the beginnings of recessions and expansions. Thanks to Mitchell’s work, the measurement of business cycles was well advanced by 1930. But there was no widely accepted theory of business cycles. In th ...
... Research, an independent, nonprofit organization that to this day has the official role of declaring the beginnings of recessions and expansions. Thanks to Mitchell’s work, the measurement of business cycles was well advanced by 1930. But there was no widely accepted theory of business cycles. In th ...
15.1 The Evolution of Fiscal Policy Objectives
... The Rise of Fiscal Policy Before the Great Depression, most policy makers believed that an economy producing less than its potential in the short run would move to its potential in the long run without help from the federal government. They thought the government should just balance its budget and ...
... The Rise of Fiscal Policy Before the Great Depression, most policy makers believed that an economy producing less than its potential in the short run would move to its potential in the long run without help from the federal government. They thought the government should just balance its budget and ...
Austrian Economics—The Ultimate Achievement
... of liquidation of inventories will only aggravate the crisis by extinguishing stocks of physical goods which are so desperately needed for the continuation of production and further capital accumulation. Malinvestment is a very serious problem but its negative consequences are less severe and will b ...
... of liquidation of inventories will only aggravate the crisis by extinguishing stocks of physical goods which are so desperately needed for the continuation of production and further capital accumulation. Malinvestment is a very serious problem but its negative consequences are less severe and will b ...
Macroeconomics of Keynesian and Marxian inspirations: Toward a
... still the object of much interest among the minority of economists politically leaning to the Left. The relationship between Keynesian and Marxian economics has always been ambiguous, but there is a lot in common concerning the macroeconomics. During the last few decades, one of the fields of our re ...
... still the object of much interest among the minority of economists politically leaning to the Left. The relationship between Keynesian and Marxian economics has always been ambiguous, but there is a lot in common concerning the macroeconomics. During the last few decades, one of the fields of our re ...
Macroeconomic Model Database (MODELBASE)
... We think it is best to start by conducting a fresh set of simulations with a macroeconomic model other than one of those used in Figure 1. We focus on the SmetsWouters model of the U.S. economy. 3 The Smets-Wouters model is representative of current thinking in macroeconomics. It was recently publis ...
... We think it is best to start by conducting a fresh set of simulations with a macroeconomic model other than one of those used in Figure 1. We focus on the SmetsWouters model of the U.S. economy. 3 The Smets-Wouters model is representative of current thinking in macroeconomics. It was recently publis ...
Revolution and Evolution in Twentieth
... has been much of what has kept macroeconomic theorists busy in the second half of the century. But there can be little doubt, with hindsight, that the redirection of attention was a masterstroke at the time, because of the improved understanding that it allowed of relations of simultaneous causation ...
... has been much of what has kept macroeconomic theorists busy in the second half of the century. But there can be little doubt, with hindsight, that the redirection of attention was a masterstroke at the time, because of the improved understanding that it allowed of relations of simultaneous causation ...
Powerpoint Presentation (ppt)
... government spending, net exports, and autonomous consumption are positively related to an increase in output. An increase in taxes is negatively related to an increase in output. ...
... government spending, net exports, and autonomous consumption are positively related to an increase in output. An increase in taxes is negatively related to an increase in output. ...
Powerpoint Presentation
... Employment, Interest, and Money • helped setup Bretton Woods • a director of the Bank of England • made a Baron o parliament (House of Lords) ...
... Employment, Interest, and Money • helped setup Bretton Woods • a director of the Bank of England • made a Baron o parliament (House of Lords) ...
Modern Perspectives on Keynesian Stabilization Policies
... conduct of fiscal policy. Most significantly, it suggests that in an environment characterized by a strong sensitivity of consumption to current income (perhaps because of the presence of borrowing constraints), deficit-financed changes in government spending will have large effects on output and em ...
... conduct of fiscal policy. Most significantly, it suggests that in an environment characterized by a strong sensitivity of consumption to current income (perhaps because of the presence of borrowing constraints), deficit-financed changes in government spending will have large effects on output and em ...
2008–09 Keynesian resurgence
In 2008 and 2009, there was a worldwide resurgence of interest in Keynesian economics among prominent economists and policy makers. This included discussions and implementation of economic policies in accordance with the recommendations made by John Maynard Keynes in response to the Great Depression— most especially fiscal stimulus and expansionary monetary policy.From the end of the Great Depression until the early 1970s, Keynesian economics provided the main inspiration for economic policy makers in Western industrialized countries. The influence of Keynes's theories waned in the 1970s, due to stagflation and critiques from Milton Friedman, Robert Lucas, Jr., Friedrich Hayek and other economists who were less optimistic about the ability of interventionist government policy to positively regulate the economy. From the early 1980s to 2008, the normative consensus among economists was that attempts at fiscal stimulus would be ineffective even in a recession, and such policies were only occasionally employed by the governments of advanced nations.In 2008, a rapid shift of opinion took place among many prominent economists in favour of Keynesian stimulus, and, from October onward, policy makers began announcing major stimulus packages, in hopes of heading off the possibility of a global depression. By early 2009 there was widespread acceptance among the world's economic policy makers about the need for fiscal stimulus. Yet by late 2009 the consensus among economists began to break down, and in 2010 with a depression averted but unemployment in many countries still high, policy makers generally decided against further fiscal stimulus. With the end of the brief consensus for Keynesian policies, but with the neoliberal policies that characterised the Washington Consensus era still viewed by many as discredited, several commentators have predicted that the Macroeconomic domain will see a return to ideological struggles.